Arkadium CEO to Startups: Growth-at-all-costs Mantra is as Sustainable as a Coal Plant

Source: New York Business Journal

A “new gospel” is starting to spread in startup land, a recent New York Times feature proclaimed. Young tech companies, once fueled by a wave of venture capital-funded excess, are preferring “positive unit economics” over rapid expansion.

For Arkadium CEO Jessica Rovello, this is a no brainer.

The New York-based company, a go-to service for news publishers to create interactive content and digital games, has tried its best to be a lean operation since it first launched in 2001. Last year, Arkadium bought out its early-stage investor, Edison Ventures, and Rovello boldly proclaimed that startups need to “get away from the de facto VC growth model.”

The “growth-at-all-costs” mindset Rovello scrutinized was one exemplified (to its detriment) by WeWork. The office-space startup practically ran out of cash, pulled its IPO and saw its valuation plummet 83 percent.

I reached out to the Wellesley College alum to discuss the evolving startup culture, what it’s like running a company with her husband and what advice she has for other entrepreneurs:

Any advice to entrepreneurs who don’t know whether to ditch the “spend big, grow fast” mantra?
The “growth at all costs” mantra is about as modern and sustainable as a coal plant. If you’re interested in burning out your employees and yourself, making decisions based on investor opinions versus customer desires, being on a never ending treadmill of needing to raise capital and after all that not owning or controlling your business then by all means follow that path.

How did Arkadium deal with those pressures?
It’s definitely difficult to zig while everyone around you is zagging. It takes strong convictions and a lot of confidence. We handle it by surrounding ourselves with sane business people who have built sustainable, profitable, large businesses over the long term and by reminding ourselves that we wouldn’t have survived the last two recessions had we not put a premium on profitability and paced growth.

Who would you say was your main mentor?
Strauss Zelnick is our earliest and primary mentor, but we’ve drawn lots of knowledge and support from Dave Wharton and the Tugboat Institute, which is a group made up entirely of “evergreen” entrepreneurs like us.

You run Arkadium with your husband Kenny Rosenblatt. What’s your advice to other couples that run companies together?
My main advice would be to ignore what everyone around you says and do what works for you, feels right and is showing success. I’m often confronted by people who say, “I could never work with my spouse, we’d kill each other!” which may be true for them – but not us. We feel very lucky to have created work-life harmony and to know that our most trusted advisor also happens to be our spouse.

Do you ever unplug from work?
We never “turn off” work in the same way we never “turn off” being parents. Building our business is just part of who we are, however, we often turn off technology. We have a farm in upstate New York that we spend a lot of time at that has no cell signal and no wi-fi.

What’s Arkadium planning next?
After 18 years of being in business we’re thrilled that as of this writing we’re the number one search result on Google for “games.” Our plan is to keep on making and distributing games that grown-ups all over the world love to play.